Moderna Third Quarter 2026 Conference Call - MODERNA INC

Explicit Guidance:

• 2026 Total Revenue Growth: Increased to a range of 15% to 25% year-over-year growth (previously up to 10%), driven by stronger-than-expected uptake of MNEC Spike (mNext Spike) in the U.S. and international partnerships in the UK, Canada, and Australia.
• 2026 Cost of Sales: Forecast at $1.7 billion, including a $900 million litigation charge; excluding this charge, significant gross margin improvements are expected.
• 2026 R&D Expenses: Reduced by $200 million to $2.7 billion due to wind-down of infectious disease studies and operational efficiencies.
• 2026 SG&A Expenses: Maintained at approximately $1.0 billion, flat year-over-year, with higher expected costs in Q4 due to commercial activity.
• 2026 Cash Costs: Lowered by $200 million to $3.8 billion (excluding stock-based compensation, depreciation, and amortization).
• 2026 Total Operating Expenses (Ex-Litigation): Expected at $4.5 billion.
• 2026 Capital Expenditures (CapEx): Lowered to $200 million (from a prior range of $200–300 million).
• 2026 Income Tax: Expected to be negligible.
• 2026 Cash & Investments: Projected to end the year between $8.1 billion and $8.3 billion; excluding the $2.6 billion convertible note proceeds, projected to be $5.5–5.7 billion.
• 2027 Outlook: Management anticipates continued growth drivers in 2027, including flu vaccine growth, Europe market expansion, Latin America partnerships, and potential approval of Intismoran (INT) for melanoma.

Business-Segment Outlook:

• Respiratory Vaccines:
  • mFluciva (Flu): US FDA approval for ages 50–64 and accelerated approval for ages 65+ received; approved in Canada; EU, Australia, and Taiwan reviews ongoing. Expected to contribute to revenue growth in 2027.
  • mNext Spike (COVID-19): Annual strain updates approved for 2026–2027 season in US, Canada, Japan, and Taiwan; updated strain also approved in EU. Deliveries underway globally.
  • mCombriax (Flu/COVID Combo): Approved in Europe and Canada; under review in Japan, UK, Australia, and Switzerland; US filing decision pending further FDA discussions.
  • mResvia (RSV): Approved in 44 countries; Phase III data supports revaccination potential in adults 60+ who previously received protein-based RSV vaccines.
• Infectious Disease Pipeline:
  • Norovirus (mRNA-1403): Phase III did not meet early success criteria; no additional winter cohort enrollment planned; engaging with health authorities for next steps.
  • Ebola (mRNA-1469): Selected for Phase II-III advancement following WHO Technical Advisory Group recommendation.
• Oncology & Rare Diseases:
  • Intismoran Autogene (INT): Positive Phase 3 data in resected melanoma (42% reduction in risk of recurrence/death); Adjuvant BLA submission targeted for "this year" (2026) with a goal of approval in 2027.
  • Lung Cancer (NSCLC): Adjuvant Phase III study (INTRAPATH-002) fully enrolled; two additional Phase III studies enrolling (neoadjuvant setting and Stage I monotherapy); no specific readout timing provided yet.
  • Renal Cell Carcinoma (RCC): Phase II study fully enrolled with event-driven readout expected late 2026 or early 2027; optimistic about positive results.
  • Bladder Cancer: Phase II studies fully enrolled (adjuvant and non-muscle invasive); Phase III studies not yet initiated.
  • Pancreatic Cancer: Phase I data presented showing T-cell responses despite low tumor mutational burden; next steps (regimen, combo with RAS inhibitor) under discussion with Merck.
  • Rare Diseases: Registrational trial in Propionic Acidemia (PA) on track for results later in 2026; Methylmalonic Acidemia (MMA) pivotal trial decision deferred until PA readout.
  • T-Cell Engagers (mRNA-2808): Phase I data in multiple myeloma to be presented at ASH in December; early-stage proof-of-concept.
  • Cancer Antigen Therapies (mRNA-4194): Phase I/II in Lynch syndrome ongoing; Phase I in melanoma and NSCLC ongoing.

Market and Competitive Outlook:

• Demand Trends: Overall US respiratory demand strong (44.1 million doses administered by late October, +3% YoY); Flu vaccinations trending ahead of last year, COVID-19 slightly behind but momentum stable.
• Pricing: Explicitly stated as premature to discuss pricing for Intismoran (INT); commitment to pricing based on value created.
• Competitive Landscape: Management emphasizes competitive advantage via proprietary algorithm/algorithmic design and the "treasure trove" of real-world data from Phase 2/3 trials to refine neoantigen selection and improve future product efficacy.
• Share Dynamics: Expectation of shifting global vaccination rates toward stability; strategic partnerships driving international share growth.

Macro / Industry Outlook:

• Regulatory Environment: Active engagement with regulators (FDA, EMA, WHO) for various pipeline assets; no specific macroeconomic regulatory changes (tariffs, rates) anticipated to materially impact the near-term outlook beyond standard compliance timelines.
• Supply Chain: Secured a five-year manufacturing agreement in Mexico for COVID-19 vaccine supply.
• Market Timing: Shifts in product launches and regulatory approvals (e.g., Intismoran) anticipated to impact 2027 revenue profiles.

Strategic Initiatives:

• Product Launches: Accelerated rollout of MNEC Spike and mFluciva in the US and Canada; expansion of mResvia into revaccination markets.
• Regulatory Submissions: Aiming to submit BLA for Intismoran in melanoma in 2026 to target 2027 approval.
• Financial Restructuring: Completed $3 billion convertible note issuance ($2.6B net proceeds) with cap calls to mitigate dilution; strengthened balance sheet with $8B cash.
• Talent: Welcomed back Juan Andres to Executive Committee to lead global manufacturing and scaled-out individualized manufacturing.
• Partnerships: Continued collaboration with Merck for Intismoran development and registration; collaboration with CEPI for Ebola; collaboration with Eatics for cell therapy enhancer.

Risks and Headwinds to Outlook:

• Regulatory Uncertainty: Delays in approvals for Flu/COVID combo vaccine in the US (dependent on post-launch FDA engagement) and potential regulatory outcomes for Norovirus and Bladder cancer programs.
• Clinical Failure: Risk that Phase II RCC or Pancreatic programs may not meet statistical criteria for advancement despite current optimism.
• Pricing Pressure: Uncertainty regarding commercial pricing for Intismoran and market acceptance.
• Supply Chain/Execution: Reliance on timely regulatory clearance and manufacturing scale-up for individualized therapies.
• Litigation: $900 million litigation charge included in 2026 Cost of Sales guidance.
• Market Adoption: Volatility in seasonal vaccination uptake (Flu, COVID, RSV) impacting Q4 and future revenue recognition.

Management Tone on the Future:

• Confidence: Highly confident in the 2026 revenue guidance increase (15–25% growth) due to strong commercial execution and visibility into Q4.
• Oncology Sentiment: Extremely optimistic regarding Intismoran, citing consistency between Phase 2 and 3 data and the potential to translate success to other tumor types (RCC, NSCLC).
• Financial Discipline: Reiterating strong commitment to cost discipline ($3.8B cash cost target) while investing in high-growth pipeline assets.
• Strategic Momentum: Describes 2026 as a "landmark year" and the company as being at the "beginning of a scientific revolution," emphasizing the value of the platform's proprietary data.
• Forward-Looking: Explicitly states readiness to host the investment community for an Analyst Day on November 12, indicating a proactive communication strategy regarding future milestones.

Miscellaneous:

• Analyst Day: Scheduled for November 12, 2026, at the Intismoran manufacturing site in Marlboro, MA.
• Financial Results: Q3 2026 revenue of $1.3B (+29% YoY); Net income $200M (or $162M diluted EPS of $0.38 depending on specific reporting line in transcript); R&D down 27% to $583M.